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I don’t remember a time when all the key currencies were focused on pivotal levels, which will dictate respective tones going forward.
(EURUSD 1.12, USDJPY 145, GBPUSD 1.32, USDCAD 1.35, AUDUSD .68)
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USDCAD WEEKLY CHART – KEY LEVEL LOOMS
USDCAD shaking off Tuesday’s CPI report and continues to perform technically with the break of 1.3656 exposing the key level at 1.3589.
The significance of 1.3589 is that a firm break would confirm the top at 1.3977 and leave a void below it.
On the upside, there is a minor double top around 1.3624 ahead of 1.3641-56.
USDCAD DAILY CHART – WEEKLY FX OUTLOOK AND CHART POSTED OVER THE WEEKEND
(NOTE, LAST TRADE AT 1.3666)
Trading in the background and more of a laggard than a leader.
Top is in, can it reverse to a downtrend?
Current focus is on a range around 1,.37, which will dictate whether it can go after 1.3656 and below.
On the upside, back above 1.3740-50 would be needed to shift focus back to 1.38.
USDCAD WEEKLY CHART – COMMODITY CURRENCIES REBOUND
It makes sense since JPY carry trade unwinds hit commodity currencies the hardest, it is logical to see these currencies rebound (vs JPY as well) once the panic selling subsided.
What they have in common are the big wicks that suggested highs/lows are in for now.
USDCAD:
Intra-day support 1.3720
Daily chart support 1.3656
Key weekly support 1.3588 and the trendline
If it trades within 1.37-1.38, back above 1.3750-60 would be needed to shift the focus back to 1.3790-00.
Note, AUD and NZD outperforming today, CAD lagging
USDCAD 4 HOUR CHART – testing support
As noted, commodity currencies benefiting from a bounce in risk and end, for now, to the carry trade unwind.
As this chart shows, USDCAD has layers of support (tested 1.3743) but is on the defensive as long as it trades below 1.3787/90/1.38
If it trades 1,37-1.38, then keep an eye on 1.3750 to set its tone.
USDCAD 4 HOUR CHART – 1.38
While there are layers of (red line) support below the market, the spike high and quick retreat has wiped the deck of buy stops.
As this chart shows, 1.3787 is a key support but as noted, there are layers of (red line) support below it.
In any case, 1,38 will set its tone.
USDCAD WEEKLY CHART – PAUSE BELOW MAJOR HIGH
USDCAD reversing after pause below 1.3977
Still just a retracement as key levels are distant.
The move down is consistent with the repatriation argument during times of stress.
A close below 1,3834 would produce an outside day key reversal (questionable how well it works in FX). but 1.38 is likely most important in keeping the bid.
USDCAD WEEKLY CHART – NEW 2024 HIGH
Having traded to a new 2024 high (1.38653, I went to a weekly chart to fimd
1.3896 – 2023 high
1.3977 = 2022 high
as the next key levels on the upside.
For day traders, 1.3850 will likely set its tone with support on deep dips as long as it trades above 1.38 but no stops left unless a new high is made..
Next key even is the US FOMC deision on Wednesday.
